A 1099-INT form I received for an investment portfolio of California municipal bonds is showing interest income on line 1, tax-exempt interest on line 8, and "Bond premium on tax-exempt bonds" on line 13 (categorized as "Tax-exempt obligations (covered lots)".
Does the line 13 figure reduce the amount of interest which is considered tax-exempt from federal taxes and state taxes? It sure seems like it, based on the numbers which TurboTax is reporting on Form 1040 (line 2a) and Form 540, so I'm wondering why that might be the case. (I am a California resident).
Thanks,
Richard
